Friedman's Foundation Rates Voucher Plans

A report card being issued this week on the nation's school voucher
programs is designed to underscore just how far many of them depart
from "the gold standard" of universal school choice that was first
proposed nearly a half-century ago by the economist Milton
Friedman.

In its first-ever ranking of voucher programs, the foundation
established by Mr. Friedman and his wife assigns letter grades, ranging
from A-minus to C- minus, to 13 programs that provide publicly financed
vouchers or tax breaks that help subsidize the costs of private K-12
schooling.

Topping the list is Florida's voucher program for children with
disabilities, while Ohio's voucher program for Cleveland ranks second
to last, barely above a modest tax- credit program in Iowa.

Mr. Friedman, who issued a now-famous call in 1955 to divorce the
government financing of education from the operation of schools, said
last week that he regards the report card as a "very important"
step.

"You have to hold out a standard," the 91-year-old economist said in
a telephone interview from his home in San Francisco. "You may
compromise, ... but you have to know where you're headed."

Making Comparisons

Where Mr. Friedman wants to head is toward a system in which all
families can get vouchers equal to the public schools' per-pupil
budget, letting them shop among public and private schools. That
concept, the report asserts, is "the gold standard of educational
choice in America."

No place has come close to adopting such a free-market program,
however. Instead, policymakers have placed limits—on which
students are eligible, what schools can participate, and how much money
vouchers are worth—that vary greatly from program to program.

"It's time to say, 'Let's look at these compared to the gold
standard,' " said Robert C. Enlow, the executive director of the Milton
and Rose D. Friedman Foundation, based in Indianapolis. "There are
enough programs out there to begin having a discussion about the
different types of them and whether they're good or bad."

Word of the report was greeted with skepticism by voucher critics,
including People for the American Way. The Washington- based liberal
advocacy organization criticizes vouchers as ducking accountability to
taxpayers and draining funding for public schools.

"The Friedman group has always been the ones that advanced vouchers
in this country, and it's in their best interest to make voucher
programs look good across the country," said Nancy Keenan, the group's
education policy director. "They don't work, the money comes from our
public schools, and private schools don't perform any better."

Since Wisconsin kicked off the modern voucher movement in 1990 with
its Milwaukee program, voucher supporters have struggled in the legal
and political arenas. So some observers see the Friedman Foundation's
decision to rank programs as a sign of the movement's maturation.

'The Gold
Standard'

This newly created report card for voucher programs is based on a
belief that they should reflect the true cost of education, be open
to as many students as possible, and place few restrictions on
schools.

Overall
Grade

Rank of
Program

Rating

Grade

Florida "McKay"
Vouchers

3.6

A-

Arizona tax-credit
vouchers

3.5

A-

Pennsylvania
tax-credit vouchers

3.33

B+

Vermont
"tuitioning"

2.97

B

Maine
"tuitioning"

2.93

B

Florida "opportunity"
vouchers

2.87

B

Colorado
vouchers

2.73

B-

Florida tax-credit
scholarships

2.43

C+

Illinois personal-tax
credit

2

C

Minnesota
personal-tax deduction

2

C

Wisconsin vouchers
(Milwaukee)

1.83

C

Ohio vouchers
(Cleveland)

1.8

C-

Iowa personal-tax
credit

1.77

C-

SOURCE:
Milton and Rose D. Friedman Foundation

"I used to argue that the school choice movement did not have the
luxury of being able to debate about the relative merits of school
choice programs," said Clint Bolick, the president of two new national,
pro-voucher advocacy groups. "We are now strong enough to have
intrafamilial debate, and I think it's very, very healthy."

The School Choice Alliance and School Choice Advocates, the groups
Mr. Bolick is leading, will focus on securing broader educational
options for low-income families, not publicly financed vouchers for
all. Yet he welcomed the report as "an opening salvo in putting forth
one perspective," and he predicted it would prompt "some spirited,
good-faith debate."

In the perspective of the 8-year-old Friedman Foundation, good
voucher programs are defined in part by an absence of what it sees as
red tape. The foundation's complicated ranking system gives higher
grades to programs that involve relatively fewer constraints on student
eligibility, higher dollar values, and fewer rules affecting
participating schools.

The idea is to distinguish "those voucher programs that are designed
to be large, generous, and inclusive from those that are small, stingy,
and restrictive," according to the report, which was set to be made
public on March 15.

In the student-eligibility category, Florida's McKay Scholarship
program for children with disabilities gets the top grade of an
A-minus. It is open to all children eligible for special education,
regardless of where they live or their families' incomes. The
lowest-scoring, with a C-minus, is the Wisconsin program, because only
families in Milwaukee with incomes of less than 1.75 times the poverty
level are eligible.

For purchasing power, five programs get A's: Florida's McKay
program; Arizona's tax credit for individuals who donate to
scholarship-granting organizations; Pennsylvania's tax credit for
corporations that contribute to scholarship groups; and the
"tuitioning" programs in Maine and Vermont, where students in towns
without public schools at their grade levels are allowed to enroll in
secular private schools at public expense.

Getting failing grades are personal-income-tax breaks for education
expenses available in Illinois, Minnesota, and Iowa, as well as Ohio's
Cleveland program, which provides vouchers worth up to $2,700.

The tax breaks in Arizona, Illinois, Minnesota, and Pennsylvania get
A's in the "school eligibility" category because few limits are placed
on qualifying schools. The worst grade in that category, a C-minus,
goes to Maine's program, in part because it requires "schools with
large numbers of tuitioning students to administer the state test," the
report says.

Annual Project

Mr. Enlow, who wrote the report, said the foundation hopes to issue
one each year from now on. "We feel there are enough programs out there
to start reviewing them annually," he said.

One program that was passed too recently for the report is the new
federally financed voucher program approved this year for the District
of Columbia.

Mr. Friedman made clear in the interview that he takes a dim view of
the pilot, $14 million-a-year program, in part because it was packaged
with funding increases of $13 million each to the capital city's
regular public school system and its growing network of public charter
schools.

Mr. Friedman says those increases effectively triple the cost of the
$7,500 vouchers, which in his view makes passage of the new program a
potentially Pyrrhic victory. Among the attractions of vouchers, he
argues, are that they will typically save taxpayers money and introduce
competitive pressures that will stimulate public schools to
improve.

But that won't happen, he says, if public schools are insulated from
financial losses when they lose students to private schools.

"How can you afford to waste money that way?" he asked. "Since the
school system is being paid to give students away, there's no
competitive pressure on them."

Still, Mr. Friedman predicted that the District of Columbia program
would add to the momentum for more voucher initiatives. "I trust it
will be copied all over the country," he said. "The opponents are right
to be concerned about it."

And he said he had not lost hope that the kind of universal voucher
program he proposed almost 50 years ago would eventually come to
pass.

"Possibly not in my lifetime," said the nonagenarian winner of the
Nobel Memorial Prize in economics, "but I hope in yours."

Vol. 23, Issue 27, Page 5

Published in Print: March 17, 2004, as Friedman's Foundation Rates Voucher Plans

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